On February 21, 2013, the National Examination Program in the SEC's Office of Compliance Inspections and Examinations released its examination priorities for 2013 for investors and registrants. The priorities focus on areas that are perceived by the SEC staff to have heightened risk, and include topics that affect nearly every registrant, along with issues that address the four key program areas of: (1) investment advisers and investment companies; (2) broker-dealers; (3) market oversight; and (4) clearing and transfer agents.
The topics affecting nearly every registrant that the SEC will continue to focus on include: fraud detection and prevention; corporate governance and enterprise risk management; conflicts of interest; and technology.
Each of the four key program areas will also have specific priorities focused on ongoing risks, new and emerging risks, and policy topics. The priorities for the program areas include:
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For investment advisers and investment companies: examinations for registered investment advisers and investment companies; compliance with Investment Company Act rules requiring money market funds to periodically stress test their ability to maintain a stable share price; and compliance with the "pay to play" rule.
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For broker-dealers: sales practices and fraud; compliance with Exchange Act Rule 15c3-5 (the "market access rule"); and review of crowd funding businesses.
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For market oversight: risk-focused examinations of self regulatory organizations and FINRA; and inspections of equities exchanges with respect to how order types are proposed, implemented and monitored post-implementation.
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For clearing and transfer agents: the timely processing of items and transfers; accurate recordkeeping; the safeguarding of assets; the performance of annual examinations mandated by the Dodd-Frank Act; and interactions with clearing agencies to monitor their activities.
The full text of the examination priorities may be found at:
http://www.sec.gov/about/offices/ocie/national-examination-program-priorities-2013.pdf
